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Wednesday, August 21, 2013

We have been discussing it in private for a while, but now it has become more widely known: The perfume sector in the USA despite the tumultous stream of fragrance releases isn't growing as one would have expected. Although much has been demonized due to the crisis that began in 2008, the reasons may run deeper as the US economy is expected to make a recovery from its recessionary state leading up to 2017.

According to the most recent report by Canadean, an in-depth market research company who do panel research across the fast-moving consumer goods (FMCG) sector: "Consumer demand for Fragrances remains relatively weak. With a volume Compound Annual Growth Rate (CAGR) of 0.9%, the sector is forecast to be one of the slowest growing in the US Health & Beauty Industry to 2017. It will remain ahead of only the Haircare sector, but well behind other mature sectors such as Male Toiletries, Suncare and Oral Hygiene. Value growth is expected to be higher, at 1.6%. However, the value of Mass Fragrances across Female, Male and Unisex Fragrances categories will grow faster than Premium Fragrances, showing that value growth is being driven by trading-up within the Mass market.

Male Fragrances is the second largest category in the US Fragrances sector with a 30.9% share of the market in 2012 in both value and volume terms, but it is forecast to be the fastest growing to 2017. Both value and volume are projected to increase above the line at 1.7% and 0.9% respectively.

The share taken by Female Fragrances in 2012 was double that of Male products, at 66.4% of the market. Category growth is forecast to be slightly lower than that of Male Fragrances, although it will mirror the sector average for both value and volume CAGR. Unisex Fragrances took 2.6% of the market and has a projected value CAGR of 1.6% to 2017. Volume growth is expected to be slightly better than the sector average, at 1.0% for the same period.

Health & Beauty Stores record the best growth in 2012. Hypermarkets & Supermarkets, Department Stores and Drug stores & Pharmacies together accounted for almost three quarters of all Fragrances distribution in 2012. Whilst all three channels witnessed improved share, it was Health & Beauty Stores which saw the best growth, perhaps indicating a move towards more niche products at a premium price".

Perhaps this is why hip brands with their finger on the pulse, such as Marc Jacobs, are dedicating a unique site to the education and interactive fun of their customers while promoting their fragrances (such as the latest, Honey by Marc Jacobs). There is a need for engaging the consumer, obviously.

We have more interesting (and insider-rich!) commentary to do on the niche and premium perfume sector soon, so stay tuned at Perfume Shrine.

Agree completely with Astrid. Quality is GONE in the U.S. on so many fronts. The hope of ever getting it back is fading fast. That's why PerfumeShrine and blogs like it are so important. They open up new worlds to those of us who crave information about how to acquire special items...not just perfume (although that one has my heart).

i couldn't agree more with the previous comments...in the US, perfume sales suffer from a consumer base that is under-educated about quality and over-exposed to trend-based and celebrity-linked marketing. shops are filled with rubbishy fragrances, and indeed, there are whole chains of stand-alone shops selling poor quality products. absolutely everything seems to be scented in the US, and most of it is truly awful. everything from shampoo to loo paper is scented; you have to really dig to find body care and house cleaning products that are unscented. the unwary person can become a walking cacophony of cheap fragrances before even selecting an actual perfume to wear! and when it's time to do just that, odds are that the only perfumes they will be aware of are those heavily marketed trend-du-jour scents, whether they are shopping at a so-called luxury brand/shop, or for a mass-market fragrance in a "big box store".

perhaps if the fragrance corporations would like to see growth & profits, they might consider re-releasing well-loved perfumes in their original incarnations, which is to say, unadulterated by anything other than prevention of cruelty and/or protection of threatened species (both floral & faunal). they've spent fortunes producing and marketing scents that pander to the (mostly younger) masses, only to find that particular demographic has other places to spend their often limited income. they should put their corporate funds into educating the younger customer base about quality and artistry in perfume, whilst producing fewer but better new scents, as well as keeping older beauties in production. have they looked at the prices of vintage fragrances on auction sites like Ebay? have they trolled the perfume forum sites where dedicated perfume purchasers lament the loss or adulteration of so many good fragrances? have they sent well-prepared representatives to make a case for reconsideration of some of the IFRA mandates that are crippling perfumery and disappointing customers?

trend-chasing has proven to be of short-term and limited utility in many other industries; even in fashion, which is inextricably intertwined with trends and novelty, houses have found it advisable to have a dual-tier approach, maintaining couture and demi-couture lines at the same time as a mass-market line. mass-market merchants often retain prestige fashion house designers for limited runs of merchandise also, bridging the gap between the megastores and haute design. these collections, though priced higher than competing products in the same shops, typically sell briskly, even when consumers do not recognize the designer name, proving that better quality can sell to the masses. (especially in a recession, when many who appreciate quality are watching their pennies...) likewise, the wine trade recognizes that their customer base is dual-tiered, producing wines that appeal to the mass-market, yet never ceasing to make a range of better quality wines. they have found that educated consumers who can appreciate quality and artistry in wine-making make better customers over the long term. they purchase more kinds of wine, drink them more regularly, buy more expensive bottles, are more likely to buy by the case, and become lifetime customers. wineries work hard to inform visitors of the things that make wine good and great. yes, some people will continue to prefer sweet or bland wine, but many more will be intrigued and begin to develop appreciation for the range of flavors and the diversity of good wine. they'll want better quality for daily meals, and seek out certain wines to pair with various foods. wine, like perfume, is a sort of oxymoron, a daily luxury. i think some of the lessons the wine industry learned over the past few decades would transfer well to the perfume industry...

My take on the article is different. I live in a small town in western Washington, environmentally and politically liberal. There is no place I can go - public, to a meeting, Dr's office, etc that is not "fragrance free." The only place I can wear my treasured perfume without uproar is at home! I try to be understanding, but actually I resent this fiercely.

Great article! It is so true. The quality of the fragrances from the mega-fragrance companies and fashion designers such as Marc Jacobs "Honey" is horrible. There is NO honey remotely in that scent. However, it gets all the attention from glossy magazines and department stores.

Also, fragrances from Calvin Klein that have samples in magazines give me a headache all the time. That is ridiculous for a scent to do that and I cannot be the only one that is affected by it.

However, it gets media attention with glowing reports and I think that is just wrong.

Elena Vosnaki is executive editor of Fragrantica.gr, the leader in fragrance information in Greek, as well as a senior editor for the top english-speaking Fragrantica.com webzine.

Vosnaki has been Fragrance Expert on About.com and the Perfume History Curator of the Be Open Foundation exhibitionThe Garden of Wonders, A Journey in Scents in Milan. Her writing has been twice shortlisted in the FIFI Editorial Excellence Awards and is extensively quoted by authors. She is an evaluating expert on Osmoz.com.

Perfume Shrine is an award winning blog of 1000s of fragrance reviews (modern, niche, classic, vintage), articles on perfume history and aroma materials, comparisons of scents, interviews with perfumers & the fragrance industry, perfume shopping as well as scented travel memoirs, fine cuisine, tips on building a fragrance wardrobe and musings about the pleasures of the senses.